A PricewaterhouseCoopers (PwC) survey suggests that 43 percent of family businesses and firms in the country do not have succession plans in place, with just about 12 percent of the total making it as a third generation business.
Although succession planning in private and family businesses is a critical process that ensures continuity and sustainability for the business across generations, it is quite discouraging to learn most busines entities, be they family businesses or firms, do not consider a succession plan as crucial to longevity for the enterprise or firm.
It is for this reason that an Assurance Partner of PwC Ghana, Edward Gomado, said it is important for private and family businesses to have succession plans, emergency plans and exit plans.
Indeed, a succession plan is nothing but a comprehensive plan with well-integrated considerations to ensure continuity of operations and avert or withstand future threats to the business.
In addition to the above, there must equally be consideration for emergency cases when a plan must be in place to deal with such situations. According to Mr Gomado: “Life happens, things may happen suddenly; death may come in a wink. So, every family business or firm must have an emergency plan to deal with such events”.
Following the sudden disruption to businesses as a result of COVID-19, PwC noted it was dismayed to realise only a handful of businesses had succession plans.
The PwC Global Family Business Survey 2021 findings revealed only 30 percent of businesses globally said they had some kind of robust, documented and communicated succession plan in place, and this represents an increase from 15 percent in 2018.
Mr. Gomado consequently appealed for family and private businesses to leverage expertise provided by PwC in order to put their organisations on the right footing. It appears the lack of adopting succession planning has been a bane in our society. From chieftaincy disputes to business, religion and even politics, the lack of succession plans has engendered numerous leadership problems and vacuums.
Succession in family-owned businesses is a complex process that requires the buy-in of various stakeholders, including the successor’s siblings and spouse. These challenges highlight the need for improved educational levels, trust-building, clear communication of succession decisions and setting dates for transfer of responsibilities.
